Food Prices Remain High in Developing Countries

A new report says developing countries
continue to have very high food prices, despite improved global supplies of
cereals and a sharp decline in food prices elsewhere in the world.

The
UN Food and Agriculture Organization has issued its Crop Prospects and Food
Situation Report. It says the situation is worst in sub-Saharan Africa. The
urban poor are among the hardest hit. Adding to the problem is a sharp decline
in remittances from family members overseas due to the global recession.

Paul
Racionzer is an FAO agriculture economist. From Rome, he spoke to VOA English
to Africa Service reporter Joe De Capua about why food prices remain high in
developing countries.

"The
first thing to point out is that there's not just one cause. There's a whole
host of reasons that result in the situation where we're seeing high prices
remaining in these developing countries. There is one general common factor,
which I think is fairly well known in sort of economic analysis, and that
is…when prices go up very quickly in response to shock…they take a very long
time to come down again," he says.

Looking
at some of the regional causes for the high food prices in sub-Saharan Africa,
Racionzer says, "For example, in western Africa, we have a situation where
(there's) basically a regional high demand driven by the strong food processing
industry and poultry sector in Nigeria…and that's keeping prices in the whole
eastern part of the sub-region quite high."

As
for East Africa, he says, "Some reduced crops in Kenya, for example…[are]
creating a supply problem there. With a sort of, in sympathy, prices in
neighboring Uganda are also being kept high because of this factor."

In
southern Africa, the FAO economist says, "We're in what's known as the lean
period now, where they're basically just before the harvest, where supplies are
generally very low. And on top of that, we're seeing that the pace of imports
into the region has been very slow."

But
things could improve for the region. "In southern Africa, one could assume
quite confidently that once the new harvest is in full swing…there should be
this sort of normal seasonal effect of prices coming down. But it's not
guaranteed. What happened last year at the time of the rising prices, even when
harvests were happening, prices were not coming down. But one could maybe hope
that now…the international prices have come down that this season we might get
back into the normal seasonal patterns. So, for example, in southern Africa,
when the harvests come on line prices would come down there," he says.

The FAO says in East Africa, more than
17 million people face serious food insecurity due to poor harvests and
conflict. In southern Africa, high food prices and slow imports are affecting
the food security of over eight and a half million people.